Great news for FHA borrowers looking to refinance! Lower annual and UFMIP premiums for borrowers who took out their FHA loans prior to May 31, 2009. With todays historic low rates, this could add up to substantial monthly savings!

If you or anyone you know is thinking about purchasing or refinancing, please give me a call.

Competitive Rates! Excellent Service! Trusted Experience!

For the week of June 11, 2012 – Vol. 10, Issue 24

Major change going into effect today! Good news for FHA borrowers!

FHA changed its Mortgage Insurance Premium starting today June 11, 2012 for loans that were endorsed on or before May 31, 2009. The annual MIP will be 55bps, regardless of the base loan amount. The UFMIP will decrease from 1 percent to 0.01 percent of the base loan amount.

These changes could add up to substantial monthly savings for FHA borrowers who took out their FHA loans prior to May 31, 2009. If you currently have an FHA loan that you took out prior to May 31, 2009, give me a call and I'll be happy to work up the numbers to see how much you possibly could save per month.

>> Market Update

QUOTE OF THE WEEK..."I will go anywhere, provided it be forward." --David Livingstone, Scottish medical missionary and explorer

INFO THAT HITS US WHERE WE LIVE... Forward is where the housing recovery appears to be going, though some advances are bigger than others. According to a leading data aggregator, home prices rose in April for the second month in a row, UP 2.2% over March and UP 1.1% versus a year ago. Taking out distressed sales, prices were UP 2.6% for the month and UP 1.9% year over year. These price gains are at a rate not seen since late 2006 and better than 2010, when sales jumped thanks to the federal tax credit.

In April, among the 100 largest metros, only 44 saw price drops year over year, 10 fewer than in March. Even better, 6 of the 10 biggest metros reported home price increases. Analysts noted that home prices are responding to a restricted supply that they think will exist for some time to come. The supply of homes in current inventory is down to 6.5 months, a level we haven't seen in more than five years!

BUSINESS TIP OF THE WEEK... When things aren't so great and you feel dejected, just keep going! Never stop believing in yourself and your skills and don't be afraid to take risks -- you have nothing to lose.

>> Review of Last Week

FROM ONE EXTREME... The stock market rebounded from its worst day in 6 months to post its best week of the year. Go figure. The big push came Wednesday with a huge 287 point surge in the Dow, as investors scooped up the bargains and felt good about a Chinese interest rate cut they think will stimulate the world's second largest economy.Investor optimism was further encouraged at the end of the week, when it seemed likely that troubled Spanish banks would be thrown a lifeline and a fiscal crisis in the Eurozone would be averted.

All was not upbeat, though. Productivity was revised down to a minus 0.9% annual rate for Q1, and is up only a measly 0.4% in the past year. We did have good news with the ISM non-manufacturing index up to a better than expected 53.7, still in expansion territory.Finally, Friday saw the U.S. Trade Deficit shrink by a slim 4.9% in April. It's still $50.1 billion, but seeing it shrink is definitely preferable to watching it go in the opposite condition.

For the week, theDow ended UP 3.6%, at 12554; the S&P 500 closed UP 3.7%,to 1326; and the Nasdaq ended UP 4.0%, to 2858.

Feeling better about China and Europe, investors flocked to riskier stocks leaving bond prices to fall under heavy selling pressure. The FNMA 3.5% bond we watch finished the week down 0.81, at $104.30. But the Mortgage Bankers Association reported that national average rates on 30-year fixed-rate mortgages hit all-time lows for BOTH conforming and jumbo loan balances. Mortgage applications rose 1.3% for the week.

DID YOU KNOW?... Home ownership has great positive economic impact. One job is created for every two homes sold. And each home purchase generates up to $60,000 in economic activity over time.

>> This Week’s Forecast

THE DEFICIT, THE CONSUMER, THE INFLATION... Reports begin Tuesday with the Federal Budgetexpected to show an expanding deficit for the month, no surprise there. Other highlights include May Retail Sales,forecast down a tick, thanks to cautious consumers.

Better news is expected on the inflation front, with Wednesday's May PPI showing wholesale prices dipping a bit overall, followed by Thursday's May CPI indicating consumer prices down a bit and Core CPI, excluding volatile food and energy prices, well within the Fed's target range.

>> Federal Reserve Watch

Forecasting Federal Reserve policy changes in coming months... Last week Chairman Ben Bernanke told Congress the Fed would discuss a new round of quantitative easing at next week's meeting. Expect the Funds Rate to stay super low. Note: In the lower chart, a 1% probability of change is a 99% certainty the rate will stay the same.

Current Fed Funds Rate: 0%–0.25%

After FOMC meeting on:

Consensus

Jun 20

0%–0.25%

Jul 31

0%–0.25%

Sep 12

0%–0.25%

Probability of change from current policy:

After FOMC meeting on:

Consensus

Jun 20

<1%

Jul 31

<1%

Sep 12

<1%

UIE

This e-mail is an advertisement for Ed Dorame. The material provided is for informational and educational purposes only and should not be construed as investment and/or mortgage advice, or a commitment to lend. Although the material is deemed to be accurate and reliable, there is no guarantee of its accuracy. The material contained in the newsletter is the property of Guarantee Home Mortgage and cannot be reproduced for any use without prior written consent. The material does not represent the opinion of Guarantee Home Mortgage. MLO-57774; WA License CL850501; Guarantee Home Mortgage dba Golden Empire Mortgage, Inc. NMLS #2427.